Question

Name the organisation which is formed by passing a special Act of Parliament or State Legislature. Give the features of such enterprise.

Answer 1

A Statutory Corporation is formed by passing a Special Act of Parliament or State Legislature. Example: Airports Authority of India. Following are the features of such an enterprise:

• It is formed by a special Act by the parliament or state legislature which defines its power and functions.
• It has a separate legal entity.
• The Board of Directors are nominated or appointed by the Government.
• Capital is either borrowed from the government or the public.
• Free from Government Accounting and Audit Control.
• Autonomy in framing policies within the limits of the state legislature.
• Ease of operations and quick decisions can be taken due to less interference of government.
• Provides better services than governmental organisations which in turn helps in increasing profit for the corporation.